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Mar 02, 2016

Minister Varga Unveils Irinyi Plan, a Major Re-Industrialization Blueprint

This strategy aims to generate the driving force required for long-term economic growth, Minister of National Economy Mihály Varga told a press conference organized to present the new programme. Under the Plan, Hungary is to become one of the EU countries with the most highly developed industrial sectors by 2020.

The strategy named after the Hungarian innovator János Irinyi outlines the main directions of development, the Minister noted. Through the implementation of these priorities, he added, the Government adds further impetus to the industrial sector, bolsters innovation, helps create jobs and promotes the competitiveness and export potential of domestic enterprises.

In order to have a more modern industrial production structure capable of creating more added value, we must shift towards an innovation-focused economy and the industrial sector must be supported by up-to-date knowledge, research and development as well as tertiary and vocational education, he pointed out.

The proper pace of growth concerning manufacturing sector output can be achieved through the adoption of new technologies, the increasing of energy- and material efficiency, the mitigation of regional inequalities, the promotion of job creation and the optimal utilization of domestic resources.

The Minister has identified seven priority areas: motor vehicle manufacturing, manufacturing of specialized machinery and equipment, health industry- and tourism, food industry, green economy, info-communication industry and defence industry.

Funding required for the implementation of this comprehensive concept will be provided by partly EU and partly state funds, Mihály Varga said. He reiterated that 60 percent of EU funding expected until 2020, which totals HUF 12000bn, will be earmarked for economic development. The investment promotion scheme for large domestic enterprises constitutes a new element of the industrial development programme. This is designed to assist large domestic enterprises with market and growth potential to maintain and bolster their existing positions. One of the main objectives of the strategy is to increase the industrial output-to-GDP ratio from the current 23.5 percent to 30 percent until 2020, Mihály Varga stressed. This requires annual growth of 7 percent, which looks to be realistic. Concurrently, the dependence of industrial output on the motor vehicle and related supplier sectors must be reduced, and in order to achieve a more balanced output structure other sectors must also be strengthened, he stated.